Exercise 7 24 (Static) Assigning Costs to Jobs (LO 7 1, 2) Forest Components makes aircraft parts The following transactions occurred in July Purchased $119,000 of materials on account Issued $117,600 in direct materials to the production department Issued $8,400 of supplies from the materials inventory Paid for the materials purchased in transaction (1) using cash Returned $15,400 of the materials issued to production in (2) to the materials inventory Direct labor employees earned $217,000, which was paid in cash Purchased miscellaneous items for the manufacturing plant for $120,400 on account Recognized depreciation on manufacturing plant of $245,000 Applied manufacturing overhead for the month Forest uses normal costing It applies overhead on the basis of direct labor costs using an annual, predetermined rate At the beginning of the year, management estimated that direct labor costs for the year would be $3,000,000 Estimated overhead for the year was $2,790,000 The following balances appeared in the inventory accounts of Forest Components for July Beginning Ending Materials Inventory $88,200 Work in Process Inventory 73,500 Finished Goods Inventory $18,200 49,700 Cost of Goods Sold 521,500 Required a Prepare journal entries to record these transactions b Prepare T accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold

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Exercise 7-24 (Static) Assigning Costs to Jobs (LO 7-1, 2) Forest Components makes aircraft parts. The following transactions occurred in July. Purchased $119,000 of materials

Exercise 7-24 (Static) Assigning Costs to Jobs (LO 7-1, 2)

Forest Components makes aircraft parts. The following transactions occurred in July.

Purchased $119,000 of materials on account.
Issued $117,600 in direct materials to the production department.
Issued $8,400 of supplies from the materials inventory.
Paid for the materials purchased in transaction (1) using cash.
Returned $15,400 of the materials issued to production in (2) to the materials inventory.
Direct labor employees earned $217,000, which was paid in cash.
Purchased miscellaneous items for the manufacturing plant for $120,400 on account.
Recognized depreciation on manufacturing plant of $245,000.
Applied manufacturing overhead for the month.

Forest uses normal costing. It applies overhead on the basis of direct labor costs using an annual, predetermined rate. At the beginning of the year, management estimated that direct labor costs for the year would be $3,000,000. Estimated overhead for the year was $2,790,000.

The following balances appeared in the inventory accounts of Forest Components for July.

	Beginning		Ending
Materials Inventory		?		$88,200
Work-in-Process Inventory		?		73,500
Finished Goods Inventory		$18,200		49,700
Cost of Goods Sold		?		521,500

Required:

a. Prepare journal entries to record these transactions. b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.